Transcript Business process model

CHAPTER 2
Decision Making and
Business Processes
Opening Case:
Information Systems
Improve Business
Processes at Grocery
Gateway
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Chapter Two Overview
• SECTION 2.1 - DECISION-MAKING AND
INFORMATION SYSTEMS
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Decision Making
Transactional Data & Analytical Information
TPS, DSS, and ESS
Artificial Intelligence
AI VS, TPS, DSS, and EIS
• SECTION 2.2 – BUSINESS PROCESSES
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Understanding the Importance of Business Processes
Business Process Improvement
Business Process Reengineering
Business Process Modelling
Business Process Management
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LEARNING OUTCOMES
1.
Explain the difference between transactional data and
analytical information, and between OLTP and OLAP.
2.
Define TPS, DSS, and EIS and explain how
organizations use these types of information systems
to make decisions.
3.
Understand what AI is and the four types of artificial
intelligence systems used by organizations today.
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LEARNING OUTCOMES
4.
Describe how AI differs from TPS, DSS and EIS.
5.
Describe the importance of business process
improvement, business process reengineering,
business process modelling, and business process
management to an organization and how information
systems can help in these areas.
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SECTION 2.1
DECISION-MAKING
SYSTEMS
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Decision Making
• Decision-Making, Problem-Solving, and
Opportunity-Seizing Information Systems
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DECISION MAKING
• Reasons for the growth of decision-making
information systems
– People need to analyze large amounts of
information
– People must make decisions quickly
– People must apply sophisticated analysis
techniques, such as modeling and forecasting,
to make good decisions
– People must protect the corporate asset of
organizational information
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TRANSACTIONAL DATA &
ANALYTICAL INFORMATION
• Moving up through the organizational pyramid, users move
from requiring transactional information to analytical
information
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Transactional data & analytical
information (Contd.)
• Online transaction processing (OLTP) – the capturing of
transaction and event information using technology to (1)
process the information according to defined business
rules, (2) store the information, (3) update existing
information to reflect the new information
• Online analytic processing (OLAP) – this is the analysis
of summarized or aggregated information sourced form
transaction processing systems, and sometimes from
sources external to the organization.
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Transaction Processing Systems
• Transaction processing system (TPS) - the basic
business system that serves the operational level
(analysts) in an organization
A TPS performs OLTP and handles transactional data
such as order-entry.
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Decision Support Systems
• Decision support system (DSS) – models information
to support managers and business professionals during
the decision-making process.
• DSS are examples of management information systems.
• A DSS can be used on transactional data or analytic
information depending of the depth of analysis desired.
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Decision Support Systems
• Three quantitative models used by DSSs include:
1. Sensitivity analysis – the study of the impact that
changes in one (or more) parts of the model have
on other parts of the model
2. What-if analysis – checks the impact of a change
in an assumption on the proposed solution
3. Goal-seeking analysis – finds the inputs
necessary to achieve a goal such as a desired level
of output
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Decision Support Systems
• “What-if” analysis
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Decision Support Systems
• Goal-seeking analysis
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Decision Support Systems
• Interaction between a TPS and a DSS
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Executive Information Systems
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Executive information system (EIS) – a
specialized DSS that supports senior level
executives within the organization
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EIS differs from DSS as the former typically
contains information from external sources as
well as information from internal data sources.
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Executive Information Systems
• Interaction between a TPS and an EIS
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Digital Dashboards
• Digital dashboard – integrates information
from multiple components and presents it
in a unified display
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ARTIFICIAL INTELLIGENCE (AI)
• Intelligent system – various commercial
applications of artificial intelligence
• Artificial intelligence (AI) – simulates
human intelligence such as the ability to
reason and learn
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ARTIFICIAL INTELLIGENCE (AI)
• The ultimate goal of AI is the ability to build
a system that can mimic human intelligence
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ARTIFICIAL INTELLIGENCE (AI)
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Four most common categories of AI
include:
1. Expert system – computerized advisory
programs that imitate the reasoning
processes of experts in solving difficult
problems
2. Neural Network – attempts to emulate the
way the human brain works
– Fuzzy logic – a mathematical method of handling
imprecise or subjective information
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ARTIFICIAL INTELLIGENCE (AI)
• Four most common categories of AI include:
3. Genetic algorithm – an artificial intelligent
system that mimics the evolutionary, survivalof-the-fittest process to generate increasingly
better solutions to a problem
4. Intelligent agent – special-purposed
knowledge-based information system that
accomplishes specific tasks on behalf of its
users
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OPENING CASE QUESTIONS
1.
Information Systems are Central at Grocery
Gateway
What information systems are used at Grocery
Gateway? Would you classify these systems as TPS,
DSS, or EIS?
2.
How do these systems support operational, analytical
or strategic level decisions?
3.
What steps could the company take to leverage the
transactional information that is collected by the
information systems outlined in the case to help make
analytical and strategic decisions for the company?
4.
Identify a few key metrics that Grocery Gateway
marketing executives might want to monitor.
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SECTION 2.2
BUSINESS PROCESSES
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UNDERSTANDING THE IMPORTANCE
OF BUSINESS PROCESSES
Sample Business Processes
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UNDERSTANDING THE IMPORTANCE
OF BUSINESS PROCESSES
Business process – a standardized set of
activities that accomplish a specific task,
such as processing a customer’s order
Customer facing processes – result in a
product or service that is received by an
organization’s external customer.
Business facing processes – are invisible
to the external customer but are essential
to the effective management of the
business
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UNDERSTANDING THE IMPORTANCE
OF BUSINESS PROCESSES
Customer Facing, Industry-Specific, and
Business Facing Processes
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BUSINESS PROCESS IMPROVEMENT
Business process improvement – attempts to
understand and measure the current process
and make performance improvement
accordingly.
The purpose of BPI is to obtain gradual, incremental
improvement to the process under focus.
There are five basic steps associated with BPI.
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BUSINESS PROCESS
REENGINEERING
Business process reengineering (BPR) – the
analysis and redesign of workflow within and
between enterprises.
• BPR is radically different from BPI.
• It assumes the current state to be irrelevant, inefficient,
or broken and must be overhauled from the scratch.
• The purpose of BPR is to:
- advocate a clean slate approach
- make all business processes best-in-class
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Finding Opportunity Using BPR
• A company can improve the
way it travels the road by
moving from foot to horse
and then horse to car
• BPR looks at taking a
different path, such as an
airplane which ignores the
road completely
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Finding Opportunity Using BPR
• Progressive Insurance mobile claims process
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Finding Opportunity Using BPR
• Types of
change an
organization
can achieve,
along with the
magnitudes of
change and the
potential
business
benefit
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Pitfalls of BPR
• Shift in focus
• Employee resistance
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BUSINESS PROCESS MODELLING
Business process modelling (or mapping) – is
the activity of creating a detailed flow-chart or
process map of a work process showing its
inputs, tasks, and activities, in a structured
sequence.
Business process model – is a graphic
description of a process, showing the sequence
of process tasks, which is developed for a
specific purpose and from a selected viewpoint.
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BUSINESS PROCESS MODELLING
As-Is and To-Be Process Model for Ordering a Hamburger
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BUSINESS PROCESS MODELLING
As-Is and To-Be Process Model for Order Fulfillment
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BUSINESS PROCESS MODELLING
Customer Service As-Is Process Model
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BUSINESS PROCESS
MANAGEMENT
Business Process Management (BPM) – integrates all of
an organization’s business processes to make individual
processes more efficient.
Key reasons for using BPM:
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BUSINESS PROCESS MODELLING
EXAMPLES
E-business Process Model
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BUSINESS PROCESS MODELLING
EXAMPLES
Online Banking Process Model
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BUSINESS PROCESS MODELLING
EXAMPLES
Customer Order Business Process Model
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BUSINESS PROCESS MODELLING
EXAMPLES
eBay Buyer Business Process Model
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BUSINESS PROCESS MODELLING
EXAMPLES
eBay Seller Business Process Model
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OPENING CASE QUESTIONS
Information Systems are Central at Grocery
Gateway
5.
Describe how Grocery Gateway’s customer Web site
improves or supports Grocery Gateway’s business
processes.
6.
Describe how Descartes’ fleet management software
improved Grocery Gateway’s logistics business
processes.
7.
How do those improvements in business process
affect the customer experience? The company’s
bottom line?
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OPENING CASE QUESTIONS
Information Systems are Central at Grocery
Gateway
8.
What other kinds of information systems could be
used by Grocery Gateway to improve its business
processes?
9.
Comment on the need for integration between the
various types of information systems at Grocery
Gateway. What benefits from integration do you see
for the company’s various business processes? What
challenges to you think will exist in facilitating such
integration?
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CLOSING CASE ONE
Information Systems Are Critical For Take-Off in
Canada’s Airline Industry
1. What advantages are there for an airline to
use a revenue management system.
2. Are revenue management systems a
competitive advantage or simply a new
necessity for doing business in the airline
industry today?
3. What type of decisions could a revenue
management system be used to help make?
4. Is a revenue management system a TSP,
DSS, or an EIS?
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CLOSING CASE ONE
Information Systems Are Critical For Take-Off in
Canada’s Airline Industry
5. Would the revenue management system
described in the case contain transactional
data or analytical information?
6. What types of metrics would an airline
executive want to see in a digital dashboard
displaying revenue information?
7. How could AI enhance the use of an airline’s
revenue management system for decision
support?
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CLOSING CASE TWO
Leveraging the Power and Avoiding the Pitfalls of
BPM
1. How can BPM help improve global outsourcing?
Records management? Supply chain management?
2. What other business activities are excellent candidates
for BPM?
3. Which of the five pitfalls mentioned above do you think is
the most important? Why?
4. Which of the five pitfalls mentioned above do you think is
the most common pitfall that organizations face when
undergoing BPM? Why?
5. What is the advantage of treating BPM as a project, as
opposed to some other type of business activity?
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CLOSING CASE THREE
Improving Business Processes at UK’s Woburn
Safari Park
1. What were the benefits of creating “As-Is”
models of current business processed at WSP?
2. How did information systems help identify
problem areas in the feed logistics process?
3. How did information systems help improve the
management of feed logistics?
4. Are information systems necessary for business
process improvements? Explain.
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